NGEx Resources Inc. ("NGEx" or the "Company") is pleased to provide an update on the conceptual studies underway to evaluate development options for its Los Helados project.
Following receipt of updated resource estimates for the project in the second half of 2013 the Company contracted an independent third party engineering group to conduct a high level assessment of possible development options. The scope of this ongoing option study includes an evaluation of potential mining methods and production rates, geotechnical drilling, ongoing metallurgical test work, including comminution studies, and development of high level processing flow sheets and mass balances. Work is ongoing and a variety of potential development scenarios continue to be considered. Similar studies are also underway at the Josemaria project. Highlights from engineering work completed to date include:
- Preliminary results from Los Helados which suggest that a large scale block caving operation with the potential to mine 75,000-100,000 tonnes per day is a technically feasible development option which would allow early mining of the higher grade core of the Los Helados Deposit (Indicated Resource at a cut off grade of 0.6% CuEq*, 457Mt @ 0.73% CuEq*, 0.56 %Cu, 0.23 g/t Au), with the potential to positively impact project economics. This higher grade core is included within a larger Indicated Resource at a cut off grade of 0.5% CuEq*, of 839Mt @ 0.65% CuEq, 0.50 %Cu, 0.19 g/t Au 1. If developed such a mine could potentially produce 100,000 to 150,000 tonnes of copper per year, 115,000 to 140,000 ounces of gold per year, 700,000 to 1,200,000 ounces of silver per year. These estimates are based on the current resource model and the metallurgical test work completed to date1. Studies are ongoing and the above are only intended to provide a general idea of possible production levels.
While these results are considered to be encouraging and to warrant further evaluation it is important to note that these are preliminary results based on an analysis of the current resource models and metallurgical test work and include a variety of assumptions that may change with further study. The economic viability of the options presented above has not been determined and there is no guarantee that they will ultimately prove to be viable. The Company is currently targeting completion of a Preliminary Economic Assessment that will address those questions for the second half of 2014.
Baseline environmental programs, including review of areas for potential infrastructure are underway, with field work in progress during the current South American summer season.
Together, the Los Helados and its sister Josemaria deposit located 12 km to the southeast host a combined Indicated resource at a 0.3% CuEq* cut off of 21.4 billion pounds of copper, 15.5 million ounces of gold, and 107 million ounces of silver with additional mineralization in the Inferred category1,2. The two deposits collectively comprise one of the largest grass roots copper-gold discoveries made in South America in recent years.
Wojtek Wodzicki, President and CEO of NGEX commented, "Los Helados and Josemaria have quickly progressed from grass roots exploration targets to significant deposits. While a lot remains to be done the conceptual engineering studies underway at Los Helados and Josemaria represent the next step in their evolution toward what we hope will one day become producing mines. We believe that the NGEX district offers an attractive combination of large, high quality resources, and growth potential through ongoing exploration that will over time create significant value for our shareholders."
The updated Corporate Presentation, available on the Company's website, includes further details of the programs and graphics of some of the concepts discussed above.
*CuEq - Copper Equivalent is calculated using US$3.00/lb copper, US$ 1,400/oz gold and US$23/oz Ag, with no provision for metallurgical recoveries. The formula used is CuEq% = Cu% + 0.6806 x Au (g/t) + 0.011 x Ag (g/t);
1 Updated Mineral Resource Estimate for the Los Helados Property, Region III of Atacama, Chile, October 31, 2013. Available under NGEX profile on sedar.com
2 Second Update Mineral Resource Estimate for the Josemaria Property, San Juan Province, Argentina, November 13, 2013. Available under NGEX profile on sedar.com